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Jupiter: Advertising to reinvent self

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Online advertising will grow more than fivefold, to $11.5 billion, by 2003, predicted Jupiter Communications last month at its annual Online Advertising Forum in New York.

But Patrick Keane, senior analyst and director of Jupiter's online advertising strategies practice, said the bigger impact will be a reinvention of traditional advertising.

"The Internet is looking more like niche cable and magazines than traditional broadcasting," he said, and that's where the competition will be most telling.

Mr. Keane predicted 13% of the classified advertising business will simply disappear in the next four years, erased by heavy discounting and free listings at job and auction sites. "It's something all newspaper companies have to consider," he said.

Perhaps the most controversial prediction in the report is that the cost-per-thousand paid on top sites such as Yahoo! will rise, from an average of $2.60 to $4.80. But Mr. Keane said that should be seen in context: The Internet Advertising Bureau last month released results of its first-quarter survey on Internet advertising, which indicated fewer Web sites are getting the bulk of advertising revenue, expected to reach $3 billion to $4 billion this year.

Following Mr. Keane to the forum podium, Yahoo! Chairman Tim Koogle said his site already gets 9 billion page views a month, and the number is growing quickly.

Moving audience

Most banner opportunities aren't sold today, Mr. Keane said, and simply selling out the site at current prices, which is what he expects, will raise the effective CPM dramatically.

Jupiter asked what medium the Internet is replacing in usage, and 42% of respondents in its survey said they're watching less television.

Eighteen percent said they're reading fewer newspapers and magazines, Mr. Keane said, and those are the industries with the most to lose. But "you're not losing an audience; it's moving online," he said, and that can easily be on the same brands.

Overall, the Jupiter report found that a consistent message integrated across all media can be a winning strategy, Mr. Keane said.

With the results of online advertising becoming increasingly easier to measure, and with other media pointing to Web sites for fulfillment, that also means those results will become easy to measure.

"In five years, all media will be held to the same accountability as the Internet," he said.